The Network 18 group is India’s most diversified media company. However, the net-worth of several group firms of the company has been completely eroded; they are sick companies, belying their glitzy images and relentless expansions
Media and entertainment company Network18 has been pumping money into its cash-strapped, loss-making businesses, to keep them alive. Unfortunately, several group companies and subsidiaries of Network18 are so heavily weighed down by losses, that their net-worth has been completely eroded. Belying their glitzy public images and continuing expansions, they are essentially sick companies.
The net-worth of both Viacom18 and IBN Lokmat has substantially eroded. IBN18 Broadcast, a group company, has investments in Viacom18 Media and IBN Lokmat. Although Viacom18, which is a 50:50 joint venture company of IBN 18 Broadcast and Viacom Inc, made a profit of Rs5.70 crore for the quarter ended 31 December 2009, IBN Lokmat is in the red, having incurred a loss of Rs4.36 crore for the same period. IBN Lokmat is a 50:50 joint venture company of IBN 18 Broadcast and the Lokmat Newspaper group.
Infomedia18, the publishing subsidiary of group company TV18, shares the same fate. It incurred a loss of Rs84.65 crore during the financial year 2008-09 and Rs43.15 crore for the nine months ended 31 December 2009. It has registered a net loss of Rs12.88 crore for the quarter ended December 2009. As a result, the company’s accumulated losses exceed the company’s share capital and reserves. It had to apply to the Board for Industrial and Financial Reconstruction (BIFR), as required under the provisions of Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985. The application was rejected on technical grounds. Group parent company Network18 had to come to the rescue of its beleaguered subsidiary for now. It extended financial support to Infomedia18 by infusing liquidity through inter-corporate deposits of Rs58.50 crore. It had also supported it when Infomedia’s rights issue failed last week.
The Network 18 group is India’s most diversified media company. Its properties and titles are spread across print, Web and television (news, business, general entertainment and music). Almost all of them are making losses. Several new businesses such as CNN IBN and IBN Lokmat, IBN7 and Infomedia were launched or acquired in a very short span of time between 2005-08, funded mostly through public money and later through bank finance. Virtually nothing has been funded through internal accruals, raising doubts about the inherent viability of the businesses.
The Indian government is leaving no stone unturned to see that South Korean steel major Posco's Rs54,000-crore project in Orissa is started after all the regulatory clearances, in the next four-five months
Steel minister Virbhadra Singh said on Monday that the Indian government is leaving no stone unturned to see that South Korean steel major Posco's Rs54,000-crore project in Orissa is kicked off after all the regulatory clearances in the four-five months, reports PTI.
"Efforts are to see that the entire matter is seen, signed and delivered in the next four-five months. This includes physical transfer of land and all regulatory clearances to Posco," Mr Singh told reporters after an eight-member Posco delegation headed by the company's chairman and global head Joon-Yang Chung called on him.
The meeting assumes significance in the wake of South Korean president Lee Myung-bak taking up the matter with prime minister Manmohan Singh later in the evening on Monday.
The minister added that once the matters are addressed, the company will start production in two years.
"It was a very fruitful meeting," Mr Joon-Yang Chung said after the meeting. Mr Singh said that mines have already been allotted to Posco but some claimants, including a state-run unit, have moved the Orissa High Court against this.
Mr Singh said that the Indian government would request the High Court to clear the case expeditiously, adding that the litigant state-run unit would also be persuaded to withdraw the case.
He said that the steel giant is also in talks with the Maharashtra and Karnataka governments for other steel projects.
Vodafone has claimed that Tata Tele and RCom were paying far less spectrum charges to the government compared to itself and Bharti Airtel
Mobile operators are clashing yet again over the fee paid for spectrum (airwaves) with Vodafone claiming that Tata Teleservices Ltd (Tata Tele) and Reliance Communications Ltd (RCom) were paying far less to the government—a charge denied by the two companies, reports PTI.
"The allegation of the incumbent (Vodafone) is illogical, baseless, misleading and a blatant attempt to divert the focus from the real issue, which is that the incumbent and other players are hoarding spectrum beyond the contracted amount of 6.2 MHz and not allowing other players to start services in Delhi," a Tata Tele spokesperson said.
Vodafone, one of the largest GSM operators, had said that service providers like itself and Bharti Airtel pay the highest spectrum charges per MHz to the Department of Telecom (DoT) compared to others. “For example, the rate per MHz per quarter for Bharti and Vodafone for seven circles is Rs1.71 crore and Rs1.37 crore, respectively.
"As compared to this, the rate paid by Tata Tele and RCom is only Rs0.27 crore and Rs0.22 crore,” Vodafone's resident director TV Ramachandran has said in a letter to DoT asking it to remove such distortions.
The rivals, however, called the allegation “absurd” and said that Vodafone has compared payment of spectrum usage for seven circles including metros and it would be very misleading to compare these circles where the incumbents have been operating for many years and have revenues far exceeding players like Tata Tele and RCom and other new players in the GSM mobile-platform space.
Upset by what it called “Vodafone’s misleading calculation”, one of the new operators said: "It seems they (incumbent operators like Vodafone) have decided not to allow any new player to survive in the market."
The spectrum fee has been a bone of contention among existing and new operators.
"Somewhere, amid all the allegations our competitor has made, it has forgotten to mention that we have paid the entry fee of Rs1,650 crore twice," Tata Tele said, adding that "We (Tata Tele and RCom) are paying double the charge for both CDMA and GSM technologies."
Anil Ambani-led RCom said that old operators like Vodafone have revenues far exceeding RCom and they are paying fees as a percentage of adjusted gross revenue. In many circles, where RCom has more revenues their spectrum fees to the government is higher than Vodafone. It is absolutely “absurd” the way Vodafone has tried to “mislead” the government, RCom said, alleging that this was done with a view to keep the spectrum hoarded by players like Vodafone and not allowing new players to compete.
It is to be noted that some of the dominant operators are said to be holding in excess of over 10 MHz of spectrum across circles beyond the contracted limit of 6.2 MHz, without paying for the difference. This itself should fetch the government over Rs20,000 crore at market price.